Corroborative evidence sustains foreign exchange contravention despite partial unreliability of statement and a procedural lapse

A procedural lapse under Rule 3(3) in commencing oral hearing before the reply to the show cause notice was awaited was not treated as fatal because the appellant participated in the adjudication, placed her defence on record, and the authority considered the reply and material before deciding the matter. Contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was sustained on independent corroborative material, including a fax message, witness statements, and the husband's letter, even though the appellant's statement was not accepted in full as voluntary and true. The penalty was also regarded as lenient and was not reduced.

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Issues: (i) Whether the adjudication proceedings were vitiated for breach of the requirement under Rule 3(3) of the Foreign Exchange Regulation (Adjudication Proceedings and Appeal) Rules, 1974. (ii) Whether contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was established and the penalty called for interference.

Issue (i): Whether the adjudication proceedings were vitiated for breach of the requirement under Rule 3(3) of the Foreign Exchange Regulation (Adjudication Proceedings and Appeal) Rules, 1974.

Analysis: The oral hearing was initiated before the reply to the show cause notice was awaited in the manner contemplated by the rule. The procedural lapse was noticed, but the appellant had already participated in the adjudication, placed her defence on record, and the adjudicating authority had considered the reply and material before passing the order.

Conclusion: The procedural irregularity was not treated as fatal to the appeal.

Issue (ii): Whether contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was established and the penalty called for interference.

Analysis: The appellant's statement was not accepted in full as voluntary and true, but the finding of contravention was supported by the fax message, the statements of the witnesses, and the husband's letter. The absence of full reliance on the appellant's statement did not displace the independent material proving receipt of money on instructions from abroad. The quantum of penalty was also found to be lenient and not requiring reduction.

Conclusion: The contravention was established and the penalty was upheld.

Final Conclusion: The appeal failed and the penalty order was sustained.

Ratio Decidendi: A finding of contravention may be sustained on independent corroborative evidence even if part of the recorded statement is treated as unreliable, and a procedural lapse in the adjudication process will not necessarily invalidate the final order where the defence has been considered on merits.

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